Lower oil prices and an expected government stimulus package should help the economy start growing again during the second half of the year, and that may be a signal for some pent-up truck buying demand to kick in.
That was the message of Kenny Vieth, partner with ACT Research, in a conference call for Truckload Carriers Association members Thursday.

There's no doubt things are currently tough, he said. "Sometimes the glass is half empty, sometimes the glass is half full. Right now the glass is shattered on the floor."

There's no doubt the numbers look bad, Vieth said, showing plummeting charts for figures like consumer confidence, personal consumption and business investment.

Yet despite people comparing this downturn to not only the recession of 1981-82 but also even to the Great Depression, Vieth shared some figures showing that things are not that bad - although this is certainly the worst downturn we've seen since the early '80s.

For instance, he showed the "Misery Index," which combines the rate of inflation and the rate of unemployment. While the number hit 11.5 percent in August, up 4 percentage points form the end of 2007, he said it's still not like it was in the early '80s, when inflation and interest rates soared along with job losses.

Vieth is predicting a "very sharp pullback in freight activity" in the first quarter of 2009. "Truckers more than anyone else in the economy have realized how dicey the economy has been over the last 18 months to two years," he said. "In three of the last four quarters, we have had contraction in the freight environment."

While "we can't overlook the fiscal irresponsibility that went on in 2004-2006 in the housing market," Vieth said, "what cooked the U.S. economy's goose was the run-up in oil prices beginning in the fourth quarter of 2007. … As we look ahead and realize that we are in the heart of the tunnel right now, or the bottom of the trough, we think the sharp fall-off in oil prices is planting the seeds for the economy's recovery. We think we should be seeing some recovery in the second half of 2009."

Vieth explained that in the 12 months ending September 2008, the U.S. spent $200 billion additionally on petroleum products. "That $200 billion dollars was money not spent on stuff that needs to get moved in a truck. As we look out over the next 12 months, we're going to have about $350 billion that would have been spent on fuel in 2008 that is not going to be spent on petroleum in 2009, and we think that is a significant stimulus as we look forward."

As we do start coming out of the trough, however, he noted that the massive amount of debt that consumers and the government piled on during the good economic times may limit growth for the next several years.

"We're looking at more of a reality-based, pay-as-you-play type of economy over the next four to five years," Vieth predicted.